thoughts and scraps of innovation, technology, evolution and life by Peter Woodford

Tuesday, December 05, 2006

Online ad revenues set to soar, says Zenith

By Saeed ShahPublished: 05 December 2006The internet will take more than one-fifth of all UK advertising revenues by 2009, according to a leading media forecaster.

ZenithOptimedia predicted that advertisers' spending on the internet will jump from £1.6bn in 2006 - level with national newspapers - to £3.0bn in 2009, not far behind television which is forecast to take £3.4bn that year.

In the UK, online advertising revenues jumped 40 per cent this year, as it took a double-digit share of ad sales for the first time. By comparison, all other media sectors - TV, radio, newspapers - except outdoor, saw advertising income shrink in 2006.

The UK has the highest proportion of advertising going to the internet of any country in the world, even ahead of Scandinavia, with 13.5 per cent of ad revenues in this country going to the internet this year - compared with 7.1 per cent in the US. In 2009, Zenith reckons 21.5 per cent of UK advertising will be online, again ahead of the rest of the world.

Jonathan Barnard, head of publications at Zenith, said the internet was taking classified advertising away from newspapers and magazines. He said the greater sophistication of the consumers' internet access - advertisers are now able to produce online videos that are similar to television ads - meant that display ad revenues would face increasing competition from the web.

However, he added that the largest category of online advertising - based around web searches - is a new phenomenon and does not necessarily suck revenues from other types of media.

Mr Barnard said the three markets where the internet will account for more than 10 per cent of advertising this year - the UK, Sweden and Norway - all had strong public sector broadcasters.

"We think in the UK, the strength of the BBC in television and radio forces advertisers to look elsewhere," he said.

The internet will take more than one-fifth of all UK advertising revenues by 2009, according to a leading media forecaster.

ZenithOptimedia predicted that advertisers' spending on the internet will jump from £1.6bn in 2006 - level with national newspapers - to £3.0bn in 2009, not far behind television which is forecast to take £3.4bn that year.

In the UK, online advertising revenues jumped 40 per cent this year, as it took a double-digit share of ad sales for the first time. By comparison, all other media sectors - TV, radio, newspapers - except outdoor, saw advertising income shrink in 2006.

The UK has the highest proportion of advertising going to the internet of any country in the world, even ahead of Scandinavia, with 13.5 per cent of ad revenues in this country going to the internet this year - compared with 7.1 per cent in the US. In 2009, Zenith reckons 21.5 per cent of UK advertising will be online, again ahead of the rest of the world.

Jonathan Barnard, head of publications at Zenith, said the internet was taking classified advertising away from newspapers and magazines. He said the greater sophistication of the consumers' internet access - advertisers are now able to produce online videos that are similar to television ads - meant that display ad revenues would face increasing competition from the web.

However, he added that the largest category of online advertising - based around web searches - is a new phenomenon and does not necessarily suck revenues from other types of media.

Mr Barnard said the three markets where the internet will account for more than 10 per cent of advertising this year - the UK, Sweden and Norway - all had strong public sector broadcasters.

"We think in the UK, the strength of the BBC in television and radio forces advertisers to look elsewhere," he said.